Research paperA comparative economic analysis of torrefied pellet production based on state-of-the-art pellets
Introduction
Torrefaction is the partial pyrolysis of wood carried out using a temperature of 220–320 °C in an inert atmosphere [1]. Torrefied wood potentially allows a greater co-firing rate at pulverised-fuel power plants primarily because of its enhanced grindability. This enables CO2 emission reductions from existing coal plants without retrofitting. This is the primary application of torrefied fuels at present. Torrefied wood can be pelletised to produce pellets with a superior energy density to that of conventional wood pellets [2], [3]. Improving the energy density of pellets reduces the CO2-equivalent emissions from their transportation. This reduction combined with enhanced grindability results in lower overall emissions from torrefied pellet production at longer transport distances [4].
Both academic and commercial interest in torrefaction has sky rocketed in the last decade. This is reflected in the output of peer-reviewed journal publications on the topic as the number of publication returns from a ScienceDirect (www.sciencedirect.com) search using torrefaction as the search term (Fig. 1).
Much of the interest in torrefaction can be traced back to two reports published by the Energy Centre of the Netherlands (ECN) in 2005 [5], [6]. ECN's combined torrefaction and pelletisation process is known as the TOP Process. The torrefied pellets specifications described in these reports have been widely cited and used in subsequent studies [7], [8], [9], [10], [11], [12], [13]. The conclusions reached in the economic analysis, which compared torrefied pellet production with conventional pellet production, stated a clear economic benefit of torrefaction [6]. The economic feasibility hinged on the condition that the superior fuel properties of torrefied pellets outweighed the extra cost needed to produce them.
The costs associated with conventional pellet production from lignocellulosic feedstock are reasonably well established [14], [15], [16], [17], [18]. Wood pellet production is most cost-effective when feedstock is cheap and requires no drying. If drying is required, the most economical method depends on the cost of available fuels. Costs are minimised, however, when heat can be supplied through the combustion of wet feedstock [14], [15]. In the case of stand-alone production, the economy of scale favours large pellet plants. After more than a decade of torrefaction research, the economics of torrefied pellet production is still very much an open question. This is partly due to the diversity of process technologies currently under development [12]. Moreover, proprietary interests of those commercialising their technology has surely been a reason for the lack of transparency in process and technical specifications.
The minimum of information required for an economic evaluation of pellet production includes: the amount of capital invested and the lifetime of a production plant, the quantity of consumable goods used in production, the thermal balance of the production process and the market value of produced pellets.
Commercially produced fuel pellets must fulfil international production standards for pellet quality. Pelletisation of torrefied wood is by no means trivial. Extreme torrefaction conditions maximise heating value, grindability and hydrophobicity of wood [19]. They also make the pelletisation process difficult, resulting in pellets with inferior durability [2], [3]. Therefore, torrefaction benefits are limited by the durability requirements of pellet standards (EN 15210). It is a good time, therefore, to revisit the economics of torrefied pellet production with up-to-date specifications on state-of-the-art pellets.
The purpose of this paper is to compare the economics of producing state-of-the-art torrefied pellets to conventional wood pellets. The main aim is to estimate pellet production costs and determine the maximum amount of capital investment needed for torrefied pellet production that would be economically feasible. Additionally, the sensitivity of the results to selected production inputs is to be determined.
Section snippets
Materials and methods
This economic analysis is carried out using a common production scenario along with published data on torrefied pellet properties and consumable inputs used in their production.
Results and discussion
Table 5 shows the cost breakdown of annual pellet production. The annual cost of torrefied pellet production is less (6.11 M€) than for conventional pellets (7.05 M€). The specific costs, however, are more for torrefied pellets; 95.54 € t−1 compared to 88.09 € t−1. The cost of producing conventional wood pellets agrees well with the range found by Thek et al. [15] in 2004, indicating that the basis of comparison herein is valid. The biggest differences between the two production processes in
Conclusions
This economic analysis compared conventional wood pellet production to state-of-the-art torrefied pellet production. The torrefied pellet specifications used in the analysis were obtained from pellets produced from a demonstrated pilot-scale process. Data on the consumables used in the production process were obtained from a scaled-up version of the same pilot-plant.
Three economic indicators (payback period, return on investment and the internal rate of return) show that torrefied pellet
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